LONDON, Oct 17 (Reuters) - Britain may use a mediaeval law dating to 1351 to charge citizens with treason if they go to fight with Islamic State insurgents in Iraq and Syria, Foreign Secretary Philip Hammond said.

Prime Minister David Cameron has warned that Islamic State, whose fighters have seized large areas of Syria and Iraq, pose a grave threat to Britain while police and intelligence officers say they have seen a rise in potentially deadly plots.

Security officials say some 500 Britons - largely with Muslim immigrant backgrounds - are believed to be fighting in Iraq and Syria, though the true figure could be much greater and security officials worry that those who return could carry out an attack on Britain.

Hammond said any British citizen who had sworn personal allegiance to the so-called Islamic State could have committed an offence under the Treason Act of 1351, which was passed during the reign of English King Edward III.

"We have seen people declaring that they have sworn personal allegiance to the so-called Islamic State," Hammond told parliament on Thursday.

"That does raise questions about their loyalty and allegiance to this country and about whether the offence of treason could have been committed," he said, adding he would bring the issue to the attention of Home Secretary (interior minister) Theresa May.

Islamic State has released videos of the beheading of two American and two British men which feature a masked, black-clad militant brandishing a knife and speaking with an English accent who has been dubbed "Jihadi John" by British media.

A member of parliament from the governing Conservatives, Philip Hollobone, has argued that using the old treason law that singles out those who commit acts of war would be more effective against jihadis than subsequent counter-terrorism statutes.

The maximum sentence for treason in Britain is life imprisonment; it was death until 1998.

The last person to be hanged for treason in Britain was William Joyce, a propagandist for Nazi Germany nicknamed Lord Haw Haw who broadcast to Britain during World War Two and who was executed in 1946.

Britain has been considered a major target for Islamist militants since the Sept. 11, 2001, al Qaeda attacks on its close ally the United States, as well as Britain's participation in the 2003 U.S.-led invasion of Iraq that toppled Saddam Hussein. Fifty-two people were killed when four young Britons carried out suicide bombings in London in 2005.

Earlier on Friday, Mark Rowley, Britain's national policing spokesman for counter-terrorism, said police were carrying out security investigations at an "exceptionally high" rate with 218 arrests so far this year.

He said they were preventing several attack plots of "varied sophistication" a year, all inspired by terrorism seen overseas.